Cloud Computing: So You Don’t Have to Stand Still

Stevie Clifton, left, a co-founder of Animoto, in its New York office. It worked with a cloud services firm to meet a leap in interest in its customized videos.Credit
Ozier Muhammad/The New York Times

CLOUD computing is the jargon of the moment in the technology industry. Google, I.B.M., Microsoft and Yahoo are just some of the big companies talking up the cloud, and a bunch of smaller ones are, too.

What, you may be thinking, is cloud computing? Basically, it means obtaining computing resources — processing, storage, messaging, databases and so on — from someplace outside your own four walls, and paying only for what you use.

It’s a mushy term that is being applied loosely to many things on the Web. Salesforce.com is now called a cloud application — after all, companies let it store their sales data, rather than running it on their own systems. Facebook, too, is a cloud platform, because software developers write applications for it and distribute them on it.

Then there’s the infrastructure cloud, where companies offer up their servers, storage and other technology to anyone who can pay. Previously, that was called grid or utility computing, because you tap into it as you need it, as you would with the power grid, and pay only for what you use. In the early days of computing, it was called time-sharing.

Thus, the concepts themselves aren’t new. “It’s true that we did not invent storage, databases, computers or database functionality,” says Andy Jassy, senior vice president of Amazon Web Services, a unit of Amazon.com that started in 2006 and was a pioneer in this new round of pay-as-you-go infrastructure cloud services. Amazon, though, does not call its cloud a cloud, except for one service called the Elastic Compute Cloud.

(The New York Times uses Amazon Web Services to make editions from 1851 to 1922 available on the Web.)

What looks to be new is the way high-speed Internet access and almost limitless supplies of storage and processing power can now be pulled together.

A vivid example of cloud power comes from Animoto, an 18-month-old start-up in New York that lets customers upload images and music and automatically creates customized Web-based video presentations from them; many people then share them with friends. Animoto gives a free video presentation to anyone who signs up for its service, and earlier this spring about 5,000 people a day were trying it.

Then, in mid-April, Facebook users went into a small frenzy over the application, and Animoto had nearly 750,000 people sign up in three days. At the peak, almost 25,000 people tried Animoto in a single hour.

To satisfy that leap in demand with servers, the company would have needed to multiply its server capacity nearly 100-fold, says Stevie Clifton, 30, a co-founder of Animoto and the chief technology officer. But Mr. Clifton and the other co-founders had neither the money to build significant server capacity nor the skills — and interest — to manage it.

An error has occurred. Please try again later.

You are already subscribed to this email.

Instead, they had already worked with RightScale, a cloud services firm in Santa Barbara, Calif., to design their application for Amazon’s cloud. That paid off during the three-day surge in growth, when Animoto did not buy or configure a single new server. It added capacity on Amazon, at the cost of about 10 cents a server per hour, as well as some marginal expenses for bandwidth, storage and some related services.

While there were hiccups — it was a huge spike, even for Amazon — none of them were major. And when demand slowed, Animoto automatically lowered its server use, and its bill. Animoto also received an unforeseen benefit: in May, Amazon.com decided to invest in it.

Combining the ability to rapidly shift capacity with a new distribution and marketing channel like Facebook is what makes the cloud exciting for software entrepreneurs, says Simeon Simeonov, technology partner at Polaris Venture Partners, a venture capital firm in Waltham, Mass. He says that anyone who works with software can use a cloud service to test an idea cheaply and quickly to see if it works.

That’s even true for companies that aren’t in the software business. Mr. Simeonov says he knows an executive at a financial services firm who has used a cloud computing service to test a concept that wasn’t given resources by his company’s information technology department.

Traditional companies are also beginning to adapt their computing infrastructure to the cloud. Reuven Cohen is founder and chief technologist at Enomaly, a software firm in Etobicoke, Ontario, that helps companies do just that. While most of its clients are technology businesses, Mr. Cohen says Enomaly is working with a New York-based bank that uses cloud computing to develop and test applications. He says that another customer is a large media business that uses the cloud to process video.

He sees this kind of need-driven use as a “fundamental change in how we manage technology.”

In fact, cloud computing is poised to do for technology what the electrical grid did for power, says Nicholas Carr, author of “The Big Switch,” which compares the rise of the cloud to the rise of electric utilities. The electrical grid streamlined operations for companies; when every home had cheap power and outlets, “you had incredible innovation in how to put all that cheap power to use,” Mr. Carr says. He thinks that cloud computing will prompt a similar cycle over the next decade.

There are practical problems that could turn the cloud into a thunderhead. The technology is still emerging: Amazon’s Simple Storage Service (S3) went offline for a couple of hours in February.

Peter O’Kelly, an analyst at the Burton Group, a technology research firm, says he thinks that many established companies will not save money by moving to the cloud. And Alistair Croll, a partner at Bitcurrent, a consulting firm that specializes in Web and cloud technologies, says companies will not be able to put data willy-nilly into the cloud because of security concerns.

At the same time, Mr. Croll says the cloud is here to stay. “The Web has become the interface” for computing, “the 110 AC outlet,” he says. That is a fundamental shift that could power a new cycle of technological innovation.